Asset management giant DE Shaw, known as much for its hedge funds as for its play on distressed assets, appears to be switching media channels in India. The financial investor, which has locked horns with promoters of Hindi print media group Amar Ujala over an exit option for its investment, is now on the way to buy a significant minority holding in the loss-making television news and entertainment company NDTV Ltd.
According to sources, DE Shaw has struck a deal to acquire 14.16 per cent stake in NDTV Ltd that runs news channels like NDTV India and NDTV 24X7 through secondary market transactions. This is expected to be routed through shares held by two other foreign institutional investors – Merrill Lynch and Nomura.
On Thursday, Merrill Lynch and Nomura had acquired 7.9 per cent and 6.2 per cent respectively from two entities representing Goldman Sachs, for around Rs 70 crore. DE Shaw can potentially buy some more shares of NDTV without triggering an open offer as long as its combined holding remains below the 15 per cent mark.
Last month, it completed a previously announced transaction where it sold 49 per cent stake in the lifestyle business of the NDTV group, housed under NDTV Lifestyle Holding Pvt Ltd, to Malaysia’s Astro All Asia Networks for $40 million. The deal was announced last September.
NDTV Lifestyle operates NDTV Good Times. The joint venture company may also diversify into complementary lines related to the lifestyle segment.
This came after a failed transaction where NDTV terminated its agreement with Scripps Networks Interactive Inc. for selling 69 per cent stake in the lifestyle channel business to the American network in May last year.
Although the company had not disclosed the reason for scrapping that deal, analysts were of the view that it had to do with better performance of the company. As per the previous deal announced in November, 2009, Scripps was to buy 69 per cent % equity stake in NDTV Lifestyle for $55 million that would have valued the channel at Rs 320 crore, less than Astro.
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